Author(s)

Tin-Chun Lin

School of Business and Economics, Indiana University-Northwest, Gary, IN, USA.

The theory of consumer choice was applied to model the relationship between restaurant tipping and consumer behavior. Using this model, we showed how consumer behavior responds to restaurant tipping and how tipping affects consumer-utility among different types of consumers and economic efficiency. The theoretical analysis reveals that tipping discourages customers’ demand for restaurant meals, which in turn creates bigger excess burden in the market.

Restaurant Tipping, Consumer Behavior, Excess Burden

Lin, T. (2015) Modeling the Relationship between Restaurant Tipping and Consumer Behavior. Theoretical Economics Letters, 5, 389-395. doi: 10.4236/tel.2015.53044.